Why the UK needs an EO Boost right now
JGA - 5 reasons why the UK needs employee ownership
This week, Deb Oxley OBE, CEO of the Employee Ownership Association shared in her blog 5 reasons why the UK needs an EO Boost. Here’s our thoughts on the 5 reasons and things to consider.
Succession
The UK has a generation of businesses whose founders and owners have seen the best and worst of times. The impact on them and their teams has shaped their views on what would be suitable options for their departure. Experience has taught them that the stability and security for employees and the dependent local communities is often stripped away when trade sales and buy outs are completed. EO Boost plays a significant role in spreading the word and ensuring this group of entrepreneurs understand the EO options available. Boost has specific content for explorers and is the ideal place to connect with specialist advisers, hear about best practice and network with other EO organisations.
Growth
Interest in employee ownership has been growing, and since the 2014 Finance Act the popularity of this business model has expanded considerably. In the year to June 2020 there was a 28% growth in the number of employee owned businesses, with the last year reporting operating profit up 5% and productivity up almost 7%. The overall growth in EO businesses has been 50% since 2017, and with a number of conversions announced this year it looks like it could be an continuing upward trend. EO Boost provides the opportunity to hear from those who have already made the transition about the positive impact it has made on their businesses and it’s ongoing success.
Resilience
There’s been a lot of turbulence recently, and not much sign of it getting better in the short term. On the whole, EO organisations take a longer term view, with a focus on the sustainability of business for future generations rather than only the benefit for the current few. This generally means that there is greater financial resilience, providing healthier balance sheets as the focus is not on short term stakeholder dividends. Employees also have a greater understanding of the overall business situation, strengths and opportunities, providing a wealth of ideas and insight to support organisations through the times when the market is rough.
Employee Engagement
Quite simply, we believe that EO is about everyone in your organisation being a co owner. Whatever the EO model, there are responsibilities, opportunities and rewards as co owners. Leaders have a role in ensuring information and support is available for all co owners to truly understand their business. All employees should be able to identify their responsibilities to the business, and the rewards they receive as a result of the businesses ongoing success. With EO the opportunities to influence, challenge and collaborate are greater, which enables greater levels of employee engagement.
Independence
This is two fold for us. Firstly, the governance structure within EO businesses bring a greater level of independence, with trustees having oversight and seeking assurances for the long term business stability. Effective independent trustees bring skills and expertise to any trust board and strengthen the business resilience.
Secondly, many businesses seek to maintain what keeps them ‘special’, especially when the founders or owners move on. When preparing for an transition to EO, owners often speak about wanting to preserve what makes them different, and to retain the unique character of their business. They don’t want to be swallowed up by bigger names or be seen as adjusting to the corporate norms, they want their businesses to continue being different and delivering their purpose - and employee ownership offers the opportunity to preserve that for years to come.